RTTNews - Friday morning, the Federal Reserve released its report on industrial production and capacity utilization in the month of April, showing that production fell by a little less than economists had been anticipating.

The report showed that industrial production fell 0.5 percent in April following a revised 1.7 percent decrease in March. Economists had been expecting production to fall 0.6 percent compared to the 1.5 percent decrease originally reported for the previous month.

A steep drop in the output of mines contributed to the modest decrease in industrial production, with mining output falling 3.2 percent amid a continued decrease in oil and gas field drilling and support activities. The decrease followed a 2.6 percent drop in March.

While manufacturing output edged down 0.3 percent in April following a 2.1 percent decrease in March, utilities output increased by 0.4 percent after rising 1.9 percent in the previous month.

Looking forward, Peter Boockvar, equity strategist at Miller Tabak, said the question with regard to industrial production is whether the huge inventory destocking that's been seen over the past 2 quarters will be followed by an increase in production to replenish those inventories.

Additionally, the Fed said the capacity utilization rate edged down to 69.1 percent in April from a revised 69.4 percent in the previous month. Capacity utilization had been expected to fall to 68.8 percent from the 69.3 percent originally reported for March.

With the decrease, capacity utilization fell to its lowest level in the history of this series, which began in 1967.

The decrease came as capacity utilization in the mining sector fell to 82.5 percent in April from 85.2 percent in March. Capacity utilization in the manufacturing sector edged down to 65.7 percent, while capacity utilization in the utilities sector edged up to 80.7 percent.

Boockvar said, Some argue that this output gap will keep a lid on inflation for a while, but the inflation we'll see will be commodity inflation driven globally not by just how utilized U.S. factories are.

In other economic news, the Labor Department released a report showing that consumer prices came in unchanged in the month of April, with a notable decrease in energy prices offsetting another substantial increase in tobacco prices.

The Labor Department said its consumer price index was unchanged in April after edging down by an unrevised 0.1 percent in March. The lack of growth in consumer prices came in line with the expectations of economists.

At the same time, the report also showed that the core consumer price index, which excludes food and energy prices, rose 0.3 percent in April after rising 0.2 percent in each of the three previous months. Economists had expected core prices to edge up 0.1 percent.

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